If you’ve ever wondered about the ins and outs of Mortgage Interest Tax Relief, you’re in the right place. Over the past while, there had been calls for the reintroduction of this relief, sparking debates on its potential impact.
But what is it, and how does it work? Am I entitled to the mortgage interest tax relief? How can I claim it? Well, we at Irish Tax Rebates are here to break it down for you.
- Is Mortgage Interest Relief still available?
- What Exactly is Mortgage Interest Tax Relief?
- How Much is Mortgage Interest Tax Relief?
- Who Can Claim Mortgage Interest Tax Credit?
- Am I Entitled to Mortgage Interest Tax Relief?
- Why Can’t I Claim My Mortgage Interest?
- How to Claim Mortgage Interest Tax Relief
- FAQs
Firstly, Is Mortgage Interest Tax Credit Relief Still Available?
Yes! The Budget 2024 confirmed it, and the Budget 2025 extended it! The mortgage interest tax relief is back to lend a hand to nearly 160,000 homeowners across Ireland.
What Exactly is Mortgage Interest Tax Relief?
The Mortgage Interest tax relief has now been introduced on mortgages paid between 2022-2024 and aims to provide financial support to homeowners by mitigating the financial burden associated with mortgage interest payments. This Mortgage Interest Tax Credit is a temporary measure and is not available to homeowners who took out a mortgage after 31 December 2022.
How Much is Mortgage Interest Tax Relief?
The amount of Mortgage Interest Tax Relief is tax relief of 20% on the increase in the interest paid on a mortgage between the end of 2022 versus 2023 and 2024, with a maximum tax credit capped at €1,250 per year.
Who Can Claim Mortgage Interest Tax Credit?
The relief is applicable to individuals with a home loan ranging from €80,000 to €500,000. However, it’s essential to review the specific eligibility criteria and any changes introduced in relevant budgetary measures for the most accurate information.
If any of the following applies to you or your property, it’s likely you’re entitled to mortgage interest tax relief:
- Interest Changes: Your mortgage costs have increased from 2022 to 2023 or 2024.
- Property Requirements: This relief applies specifically to your main home where you primarily reside, rather than investment or secondary properties.
- Mortgage Value Range: To qualify, your remaining mortgage amount needed to fall between eighty thousand and half a million euros at the end of 2022.
- Property Tax Status: Current compliance with your property tax requirements is essential for eligibility.
- Mortgage Types: Eligibility extends to homeowners who have either tracker or variable rate mortgages.
Am I Entitled to Mortgage Interest Tax Relief?
You are entitled to this mortgage interest tax credit if:
- You have had an outstanding mortgage balance of between €80,000 and €500,000 on 31 December 2022.
- Your interest has increased in 2023 and/or 2024 comparative to interest paid in 2022.
- The mortgage is for your principal private residence only.
- You must be fully compliant with your Local Property Tax obligations for the property.
Why Can’t I Claim My Mortgage Interest?
If you are unable to claim your mortgage interest, several factors could be at play. Here are some potential reasons you can’t claim your mortgage interest tax credit:
1. Your mortgage is less than €80,000 on the 31/12/2022.
2. Your mortgage is more than €500,000 on the 31/12/2022.
3. Your mortgage was taken out for investment, rental or a second property.
4. You are not compliant with Local Property Tax.
5. Your interest was at a fixed rate – so there was no change in the interest.
How to Claim Mortgage Interest Tax Relief:
You can claim your tax relief on your mortgage interest with Irish Tax Rebates now.
Here’s the documentation you will need (all documentation is required to claim this relief):
- Your Mortgage Interest Certificate for 2022, 2023 and 2024.
- Your Local Property Tax Property ID Number (in the format 1234567AH)
- Mortgage Statement confirming the outstanding balance as at 31st December 2022.
If you missed out for 2023 it is not too late. Contact us today and we can assist you with this claim.
Get your documentation ready and email us the information above to mortgage@irishtaxrebates.ie.
FAQs
1. What counts as mortgage interest?
It’s the cost of borrowing money to buy your home, and it doesn’t include things like the principal (the loan amount), insurance, or other fees.
2. Do I need to reapply for mortgage interest relief each year?
No, you don’t need to reapply every year. Once you’re approved, the relief is usually applied automatically by your lender.
3. What happens if I switched mortgage providers during 2022-2023?
If you switched mortgage providers, you need to inform Revenue and your new lender to make sure the relief is applied correctly.
4. How does mortgage interest relief work for joint mortgages?
For joint mortgages, mortgage interest relief is divided between the two people depending on how much interest each person pays.
5. How is the relief paid – as a lump sum or monthly reduction?
The relief is usually paid as a monthly reduction.
6. Can I backdate a claim if I missed applying in previous years?
Yes, you can backdate a claim for mortgage interest relief if you missed applying in previous years, and you can generally claim up to four years of relief.
